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- Title
Biased procurement auctions.
- Authors
Rezende, Leonardo
- Abstract
In a complex procurement a buyer may consider biasing the auction rules in order to account for differences in product characteristics offered by the sellers. This paper studies the gathering, disclosure and use of information about this bias. While we also describe the optimal procurement auction in our setting, the main focus of the paper is on the case where the buyer does not have commitment power. We find that without commitment full disclosure of the buyer’s preferences is optimal. Furthermore, lack of commitment distorts the buyer’s incentives to learn about its preferences: unlike the commitment case, without commitment the value of this information can be negative.
- Subjects
AUCTIONS; INDUSTRIAL procurement; CONSUMER preferences; BIDDERS; BID price; BIDDING strategies
- Publication
Economic Theory, 2009, Vol 38, Issue 1, p169
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-008-0346-8